Paxos mistakenly overestimated the US national debt in cryptocurrency

Paxos, which is responsible for the technical infrastructure of PayPal’s PYUSD stablecoin, accidentally created 300 trillion tokens instead of the planned 300 million. The company explained that the reason was an internal technical error, not external interference. Within half an hour, the situation was rectified: the excess tokens were destroyed and the correct amount was issued in their place.

The incident caused short-term disruptions in the operation of several DeFi protocols. The Aave platform temporarily suspended operations with PYUSD as a precautionary measure. The token’s exchange rate lost its peg to the dollar for a while, but quickly stabilized after the error was resolved.

According to analysts, the amount of erroneously created tokens exceeded the US national debt ($ 37 trillion) and even the global GDP ($ 117 trillion). This made the incident one of the largest technical failures in the crypto industry. Despite the quick response, the situation caused a wave of criticism on social media.

Users drew attention to the risks of centralized issuance. One comment read: «If an issuer can create tokens out of thin air, what’s to stop them from destroying any tokens, even legitimate ones, just as easily?» This called into question the level of control and transparency in dealing with assets that are positioned as secured.

In September, Paxos had already proposed the launch of a new USDH stablecoin in partnership with the Hyperliquid platform, but Native Markets was awarded the right to issue it. The PYUSD mistake was yet another reminder of the vulnerability of centralized financial solutions — even when they are backed by large tech companies.